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11.11 Business Ethics Contract Sales and Lease Contracts: Performance and Breach

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609 P.2d 331
94 N.M. 249, 609 P.2d 331, 28 UCC Rep.Serv. 1329
(Cite as: 94 N.M. 249, 609 P.2d 331)
Supreme Court of New Mexico.
Rudy S. YBARRA and Carmen N. Ybarra,
Plaintiffs-Appellees,
v.
MODERN TRAILER SALES, INC., Defendant-Ap-
pellant.
No. 12548.
April 10, 1980.
Buyers brought suit seeking to revoke their accept-
ance of a contract of the sale of a mobile home. The
District Court, Harding County, Stanley F. Frost, D.
J., found that buyers had revoked the contract under
terms of statute, and seller appealed. The Supreme
Court, Payne, J., held that: (1) four years was not an
unreasonable time for buyers' revocation of accept-
ance of mobile home where buyers complained
about defects as soon as they were discovered, con-
tinued to request seller to remedy situation, and
continued to rely on seller's assurances that it was
willing and able to repair; (2) there was sufficient
notice of revocation even though first formal notice
of revocation came with the process server, where
service of process was preceded by a continuing
series of complaints and negotiations regarding un-
acceptability of defective mobile home and re-
peated failures on part of seller to cure the defects.
Affirmed.
West Headnotes
[1] Sales 343 126(3)
343 Sales
343III Modification or Rescission of Contract
343III(C) Rescission or Revocation of Ac-
ceptance by Buyer
343k126 Time for Rescission, and Laches
343k126(3) k. Delay Induced by
Seller. Most Cited Cases
Four years was not an unreasonable time for buyers'
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 1
revocation of acceptance of mobile home where
buyers complained about defects as soon as they
were discovered, continued to request seller to rem-
edy situation, and continued to rely on seller's as-
surances that it was willing and able to repair.
NMSA 1978, § 55-2-608.
[2] Sales 343 127
343 Sales
343III Modification or Rescission of Contract
343III(C) Rescission or Revocation of Ac-
ceptance by Buyer
343k127 k. Election to Rescind, and No-
tice. Most Cited Cases
There was sufficient notice of revocation of sale of
mobile home even though first formal notice of re-
vocation came with the process server, where ser-
vice of process was preceded by a continuing series
of complaints and negotiations regarding unaccept-
ability of defective mobile home and repeated fail-
ures on part of seller to cure the defects. NMSA
1978, § 55-2-608 comment.
[3] Sales 343 126(1)
343 Sales
343III Modification or Rescission of Contract
343III(C) Rescission or Revocation of Ac-
ceptance by Buyer
343k126 Time for Rescission, and Laches
343k126(1) k. In General. Most Cited
Cases
Suit seeking revocation of acceptance of contract
for sale of mobile home was not barred by laches in
case in which nearly four years passed between ex-
ecution of contract and institution of action, where
buyers had continued to protest the unacceptability
of the defects in the home.
[4] Sales 343 128
343 Sales
343III Modification or Rescission of Contract
343III(C) Rescission or Revocation of Ac-
609 P.2d 331
94 N.M. 249, 609 P.2d 331, 28 UCC Rep.Serv. 1329
(Cite as: 94 N.M. 249, 609 P.2d 331)
ceptance by Buyer
343k128 k. Acts Constituting Rescission.
Most Cited Cases
Strict adherence to the use of some specific words
of revocation was not required of buyers of mobile
home, who complained as soon as defects were dis-
covered, but buyers were required to give sufficient
indication of revocation that there could be no sur-
prise on the part of the seller.
[5] Sales 343 119
343 Sales
343III Modification or Rescission of Contract
343III(C) Rescission or Revocation of Ac-
ceptance by Buyer
343k112 Right to Rescind
343k119 k. Defect in Quantity or
Quality of Goods. Most Cited Cases
Raised or bubbled condition of floor of mobile
home was sufficient ground for revocation of con-
tract for sale.
*249 **331 William N. Henderson, David A.
Grammer, III, Albuquerque, for defendant-appel-
lant.
Eugene E. Brockman, Tucumcari, for plaintiffs-ap-
pellees.
OPINION
PAYNE, Justice.
Plaintiffs, Rudy and Carmen Ybarra, brought this
suit seeking to revoke their acceptance of a contract
for the sale of a mobile home. The district court,
sitting as the trier of fact, found that the plaintiffs
revoked the contract under the terms of Section
55-2-608, N.M.S.A.1978. Defendant, Modern Trail-
er Sales, appeals. We affirm.
The issue on appeal is whether plaintiffs met the
conditions for revocation of acceptance of the mo-
bile home contract as required by Section 55-2-608.
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 2
*250 **332 On March 11, 1974, defendant de-
livered to the plaintiffs a new double-wide mobile
home which is the subject of this dispute. A few
days after delivery, portions of the floor began to
rise and bubble, creating an unsightly and trouble-
some situation for the plaintiffs. The trial court
found that the defects in the floor existed when the
mobile home was delivered, but that they were not
observable upon delivery. The court also found that
such defects are not acceptable in the mobile home
industry.
Plaintiffs complained about the floor as soon as its
defects were discovered and they continued to re-
quest that the defendant remedy the situation. The
defendant responded on at least three occasions by
sending repairmen to cure the defective floor, but
each time they were unsuccessful. The plaintiffs
continued to rely upon defendant's assurances that
it was willing and able to repair the floor.
Defendant alleges that after its last unsuccessful at-
tempt to repair the floor, on September 4, 1975, it
received no further complaints from the plaintiffs
regarding the unacceptability of the defects until
this suit was filed on March 10, 1978. This, defend-
ant contends, prevented it from curing the defects
during this period. Plaintiffs deny defendant's alleg-
ation saying that they continued to telephone and
visit the defendant's place of business to demand re-
pair. The district court found for the plaintiffs on
this issue. We find substantial evidence in the re-
cord to support all of the district court's findings of
fact.
Defendant complains that plaintiffs failed to satisfy
the revocation requirements of Section 55-2-608 in
that revocation of acceptance was not made within
a “reasonable time” and notice of revocation was
not given until the filing of this suit. Given the facts
of this case, we disagree with defendant's argument.
Section 55-2-608 states:
(1) The buyer may revoke his acceptance of a
lot or commercial unit whose nonconformity sub-
609 P.2d 331
94 N.M. 249, 609 P.2d 331, 28 UCC Rep.Serv. 1329
(Cite as: 94 N.M. 249, 609 P.2d 331)
stantially impairs its value to him if he has accep-
ted it:
(a) on the reasonable assumption that its non-
conformity would be cured and it has not been
seasonably cured ; or
(b) without discovery of such nonconformity if
his acceptance was reasonably induced either by
the difficulty of discovery before acceptance or
by the seller's assurances.
(2) Revocation of acceptance must occur with-
in a reasonable time after the buyer discovers or
should have discovered the ground for it and be-
fore any substantial change in condition of the
goods which is not caused by their own defects.
It is not effective until the buyer notifies the
seller of it.
(3) A buyer who so revokes has the same rights
and duties with regard to the goods involved as if
he had rejected them. (Emphasis added.)
[1] Nearly four years passed from the time the
parties executed this contract to the time the
plaintiffs instituted this action. The statute creates a
“reasonable time” standard and requires the trial
court to make a factual determination. We cannot
say that four years is unreasonable as a matter of
law. The reasonableness of the time at which revoc-
ation is communicated is dependent upon the facts
of each case. Four years, in this case, is not unreas-
onable.
[2] The statute requires the buyer to give the seller
notice before a revocation can be effective. Official
Comment 5 to Section 55-2-608 states that “(t)he
content of the notice under Subsection (2) is to be
determined . . . by considerations of good faith, pre-
vention of surprise, and reasonable adjustment.”
Defendant argues that if the seller's first notice of
revocation comes with the process server, then the
notice requirement is not satisfied. See Kohlenber-
ger, Inc. v. Tyson's Foods, Inc., 256 Ark. 584, 510
S.W.2d 555 (1974); Lynx, Incorporated v. Ord-
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 3
nance Products, Inc., 273 Md. 1, 327 A.2d 502
(1974). This will be true in most instances, but it is
not true here. In this instance service of process was
preceded by a continuing series of complaints and
negotiations regarding the unacceptability of the
defective mobile home *251 **333 and by repeated
failures on the part of the seller to cure the defects.
The process server bore only the formal tidings of
revocation. See DeCoria v. Red's Trailer Mart, Inc.,
5 Wash.App. 892, 491 P.2d 241 (1971). This con-
stitutes sufficient notice of revocation “even though
the formal rejection comes a considerable time after
the sale.” White & Summers, Uniform Commercial
Code s 8-3, pp. 262-63 (1972). See Irrigation Motor
And Pump Co. v. Belcher, 29 Colo.App. 343, 483
P.2d 980 (1971).
[3] Defendant argues that plaintiffs slept on their
rights and that laches operates to deny them the
remedy of revocation. According to the record,
however, the converse can also be argued. Plaintiffs
patiently endured the defects to provide defendant
ample time to cure them, and plaintiffs continued to
protest the unacceptability of the defects to pre-
serve their remedies. This is the factual conclusion
reached by the district court which we will not
overturn.
[4] Defendant's argument suggests that the buyer
must use some magic words of revocation in order
to give the seller effective notice. In all probability
the ordinary buyer never learns that he even has a
remedy of revocation until he goes to his lawyer in
desperation. Strict adherence to the use of some
specific words of revocation is not required of buy-
ers in the plaintiffs' position. Buyers, however,
must give sufficient indication of revocation that
there can be no surprise on the part of the seller.
We can find no basis for a claim of surprise in the
record.
[5] The defendant also argues that the defects com-
plained of by the plaintiffs are not substantial. The
trial court held to the contrary and we agree. Meas-
ured against any objective text, raised or bubbled
portions of a floor would be unacceptable to the
609 P.2d 331 Page 4
94 N.M. 249, 609 P.2d 331, 28 UCC Rep.Serv. 1329
(Cite as: 94 N.M. 249, 609 P.2d 331)

reasonable buyer as an unsightly, inconvenient and

possibly hazardous circumstance.

For the reasons stated, we affirm the district court.

IT IS SO ORDERED.

FEDERICI and FELTER, JJ., concur.

N.M., 1980.
Ybarra v. Modern Trailer Sales, Inc.
94 N.M. 249, 609 P.2d 331, 28 UCC Rep.Serv.
1329

END OF DOCUMENT

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.